If you have a traditional IRA or tax-deferred retirement plan account, once you attain age 72 (age 70½ before 2020), you must begin taking required minimum distributions (RMDs) from your accounts. If you do not withdraw the minimum amount each year, you may have to pay a 50% penalty tax on what should have been taken out.
The CARES Act passed in March 2020 allowed people to skip these withdrawals in 2020. When the Consolidated Appropriations Act was enacted on December 27, 2020, many people hoped that the suspension would be extended into 2021. Unfortunately, the RMD suspension was not extended. That means if you have not yet taken your required minimum distribution for 2021, the December 31 deadline looms. Many IRA custodians have cut-off dates for distributions, so if you have not yet taken your RMD for 2021, you should act now.
Related: How the SECURE Act will Affect Your Retirement Plan Right Now.
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